By Stokely Baksh

WASHINGTON, June 26, 2007 – Some 14,000 webcasters went offline Tuesday in protest of a copyright royalty rate increase that they argue threatens the livelihood of their industry, according to a non-profit group leading the protest.

Internet radio listeners will temporarily face interrupted programs as Web streaming services observe the "Day of Silence" initiative led by the SaveNetRadio Coalition, the group leading the protest.

Major webcasters like AccuRadio, Live365, Viacom's MTV, Real Network's Rhapsody and Yahoo! are also joining in the protest. The webcasters are upset with a March 2007 decision by the Copyright Royalty Board (CRB) requiring webcasters to pay escalating fees for each songs streamed.

Under the decision by the royalty board, which is a part of the Library of Congress' Copyright Office, the rate that webcasters must pay for digital performances will rise from 0.08 cents per song, in 2006, to 0.19 cents per song, in 2010. Although the rate is retroactive to 2006, it will not take effect until July 15, 2007.

Under copyright law, traditional radio broadcasters are exempt from paying royalties for performances of sound recordings.

The CRB did not include a percentage of revenue method for calculating royalties. That approach is strongly sought by the small webcasters.

The webcaster coalition hopes the Day of Silence will encourage hundreds of thousands of phone calls to members of Congress to vote for bills supporting webcasters, said coalition spokesman Jake Ward.

The webcasters are supporting the Internet Radio Equality Act, H.R. 2060, introduced Rep. Jay Inslee, D-Wash., and the identical S. 1353 by Sen. Ron Wyden, D-Ore.

The bills would reverse the CRB decision and require that rates in future proceedings be based upon a standard balancing the interests of copyright owners and copyright users, rather than between what a "willing buyer" would pay a "willing seller."

For the 2006-2010 period, the bills would also create a transitional rate of either 7.5 percent of annual revenues or 0.33 cents per listener/hour. Webcasters prefer those metrics, used commonly in the satellite radio industry, to the per-song measurement method set by the CRB.

Opponents of the royalty rate hike argue that the new rates will put many small webcasters out of business.

All of the major webcasting groups, including National Public Radio and the Digital Media Association, which represents major webcasters, have already appealed the CRB decision to the D.C. Circuit Court of Appeals. Webcastersare also hoping that Congress will against step in. It did so in 2002, when webcasters protested a previous decision by the Copyright Office.

GotRadio.com owner Val Starr says that passing the bill would keep her and her family from repeating the same ordeal over five years.

"It's a young industry [and] we don't have a long-standing network of allies in D.C.," said Tim Westergren, founder of webcaster Pandora. He fears that no one will appreciate the seriousness of the problem until the webcasts stop.

Even though Pandora is among the larger webcasters, he said his company can't survive under the new CRB rates. "Our only ally are the listeners," He said.

The House Committee on Small Business will hold a June 28 hearing on the impact of the CRB's decision on recording artists and webcasters.

Tom Silverman, chairman of Tommy Boy Records, Thomas Lee, president of American Federation of Musicians, Richard Eisworth, president of Cincinnati Public Radio, and Bryan Miller, of online music service La La Media Inc., are among those scheduled to testify.

John Simson, executive director of SoundExchange, said that music was at the core of webcasting businesses, and that artists needed to be paid fairly. SoundExchange is the royalty-collection agency for performances of sound recordings, and the group has supported the CRB decision.

Editor's Note: The original version of this story incorrectly listed the 2006 rate as 0.80 cents per song, instead of 0.08 cents per song. The story has been corrected.

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